Initial Coverage
Q1 2022 results
21 March 2023
Growth likely to retain amidst ongoing plans for expansion and product development. Currently, the company is entering into new international markets and is strongly developing its distribution channels.
As of Q1 2022 the DACH region accounted for 38% and such geographic differentiation would be positive for the stability of the revenue.
Products are well positioned but the aggressive competition remains a huge risk for the company. Yet, from its track history, Allterco has proven its adaptability skills. Allterco has a crucial advantage over its
peers – it is as flexible as a startup company and can occupy new opportunities promptly.
Leader in profitability. Unlike its competitors, Allterco succeeds in delivering very high margins. However, some of that would have to be sacrificed in the name of the growth in the next years. The higher S&M and R&D expenses are likely to refrain the margins from expanding.
Stock slightly underpriced. According to our DCF and CCA models, the fair value of the stock is approximately BGN 20.87, 13% higher than the last closing price.
Consolidated Q1 Results
Allterco AD (TCKR: A4L) reported 14.6% revenue growth YoY in Q1 2022, up to BGN 17.6mln. However, excluding the sale of the subsidiaries in Q1 2021, the growth equals 23% YoY. Sales of Shelly products have increased by 25.6% YoY. The management states that the higher electricity prices have boosted the revenue, as the sales of energy meters have increased tenfold. On the other hand, MyKi segment didn’t perform that well due to the still lasting COVID effects and declined by 1% YoY.
Due to the expansion of the staff, a step towards the international growth, the operating expenses increased. This resulted in slightly lower EBITDA – BGN 4.9mln, down by 3.2%.
The management was excited to announce the launch of its “Pro” devices which will take place at the end of Q2. These products will target professional clients which for now account for 1/3 of the revenue.
Rosen Dimitrov
Equity Analyst
Tel.: +359 2 937 9862
e-mail: info@sis.bg
Svetozar Abrashev
Senior Managing Partner
Tel.: +359 2 937 9869
e-mail: abrashev@sis.bg
Sofia International Securities
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